An Industry Framework to Evaluate Performance of PAYGo Solar Businesses
Solar home systems (SHS) and other solar powered appliances are made affordable through innovative pay-as-you-go (PAYGo) financing. PAYGo jointly addresses the challenges of energy access and financial inclusion for the more than one billion people — mainly rural and low income — who remain off-grid.
This nascent and dynamic industry is populated by young companies with evolving business models, many of which face similar challenges to scale and raise debt financing at suitable terms. While commercial investors have invested approximately $160 million into PAYGo companies over the last two years, PAYGo businesses still lack debt financing and rely on equity financing for shortfalls. With the right set of standardized financial reporting benchmarks, commercial funders and potential investors could more easily finance and evaluate performance for the PAYGo sector.
PAYGo Financial Analysis and Reporting Discussion
Tuesday, 6 November 2018
Followed by Cocktail Reception
(an independent side event to the Solarplaza/GOGLA Unlocking Solar Capital Africa Conference)
Please join us for the launch event of the PAYGo Financial Analysis and Reporting Initiative (PAYGO FAR). The PAYGO FAR Initiative is a partnership between IFC, GOGLA and CGAP to promote financial analysis and reporting standards in the off-grid PAYGo sector.
The event will serve to kick-off a new phase of efforts towards creating a common language of financial performance assessment. We invite investors, PAYGo companies and other providers, technical experts, and government representatives to join us as we refine and agree upon a common set of metrics to measure the financial performance of PAYGo companies.
Session 1: The PAYGo industry in the past (history and evolution), present (customers, impact, companies, investors) and future (capital mix and funding gap) including work done in this area, by GOGLA (funded by GIZ FSD) GIZ, IFC, CGAP and others.
Session 2: Identify and define challenges in standardizing industry metrics for PAYGo solar. Specific topics could include portfolio health, unit economics, revenue recognition, and others.
Session 3: Define inclusive process for addressing the challenges identified in Session 2.
We aim to finalize the event by identifying clear action steps and upcoming events that will serve to support this industry-wide effort. Additional location and agenda details will be distributed to those who RSVP. Questions? Contact us at firstname.lastname@example.org.
In the context of this PAYGo Financial Analysis and Reporting (PAYGo FAR Initiative), CGAP and Lighting Global are independent actors with an impartial interest in market development striving for an outcome that will unlock billions in capital from investors. GOGLA is a global industry association representing PAYGo providers.
The Consultative Group to Assist the Poor is a global partnership of more than 30 leading organizations that seek to advance financial inclusion. CGAP develops innovative solutions through practical research and active engagement with financial service providers, policy makers, and funders to enable approaches at scale. Housed at the World Bank, CGAP combines a pragmatic approach to responsible market development with an evidence-based advocacy platform to increase access to the financial services the poor need to improve their lives. As part of its efforts, CGAP has taken an increased interest in exploring and catalyzing the use of financial inclusion as a means of achieving other international development objectives, including increasing access to electricity, water and education.
GOGLA is the global association for the off-grid solar energy industry. Established in 2012, GOGLA now represents over 135 members as a neutral, independent, not-for-profit industry association. Its mission is to help its members build sustainable markets, delivering quality, affordable products and services to as many households, businesses and communities as possible across the developing world. The products and solutions that GOGLA members sell transform lives. They improve health and education, create jobs and income opportunities and help consumers save money. To find out more, go to www.gogla.org.
Lighting Global is the World Bank Group’s initiative to rapidly increase access to off-grid solar energy for the one billion people living without grid electricity world-wide. Through Lighting Global, IFC and the World Bank, with support from the Energy Sector Management Assistant Program (ESMAP), work with manufacturers, distributors, governments, and other development partners to build and grow the modern off-grid solar energy market, which is expected to reach 740 million people by 2022. Our programs — which include Lighting Africa, Lighting Asia, and Lighting Pacific — provide market intelligence, quality assurance, consumer education, business support services, and support for access to finance, at the global, regional, and country levels. We are also poised to address new markets and opportunities that emerge as the off-grid energy sector evolves. Our activities now include support for the productive use of solar (e.g. solar irrigation & milling), community services (e.g. for schools and health centers), super-efficient household appliances (e.g. fans, TVs, household refrigeration), and innovative pay-as-you-go (PAYG) business models that enable rural, low income populations to access modern clean energy solutions.